In this report we examine stocks that C-level officers and directors bought and sold ending the week of September 22nd, 2017. Insiders sell stock for a variety of reasons but they generally buy for just one, to make money. We only look at material amounts of money, $100k or more, as anything less could be window dressing. The bar is different on selling as the natural state of management is to be sellers. Most companies provide significant amounts of their compensation packages as stock. Therefore we analyze selling for unusual patterns; such as insider selling 25% or more of their holdings or multiple insiders selling near 52 wk. lows. Another red flag is large planned sale programs that just start out of the blue.
We generally ignore 10% shareholders as they tend to be OPM (other people’s money) and not the SMART money we are trying to go to school on. Although this info is available for free from the SEC’s Web site , Edgar, we subscribe to the Washington Service as they provide a way to manage and make sense from the realms of data. To learn more about our strategy visit our website at The Insiders Fund. We welcome your comments on our analysis. We may own positions long or short in any of these names and are under no obligation to disclose that-So do your own research.
Buying (noticeably little perhaps because of earnings blackout)
L Brands LB. Director Kollat makes the second director to step up and buy $740k at $37 per share. Another opportune move as LB is 16% higher in just 15 days. We wrote that we would should have bit on this one but I’m restraining myself as I’m not chasing a troubled retailer up 16%. Watch this one though at 12.6 times trailing 12 months earnings, there is real value here.
Shoe Carnival SCVL Dr Tomm buys 11,190 at $22.69. This buy is somewhat unusual as Shoe Carnival has rebounded sharply from its $15.02 low print August 30th. Why did he wait until now to pull the trigger? Simple he just got appointed a director on September 13th. All directors own some stock in the companies they serve on the board of so this kind of buy is generally ignored by us. I don’t know what his annual compensation for his board role is but he can afford to lose money on his stock purchase when that’s factored in. SCVL rallied sharply on 8-31 after earnings beat consensus.
Ambac Financial Group AMBC. Bond insurer CEO LeBlanc scooped up 15,000 shares on AMBC pullback related to the hurricane and Trump’s comments that bondholders would have to swallow the losses on the island’s debt. This is a complicated situation, too complicated for me.
Selling (Does anyone besides me think its odd that insiders find a way to sell during earnings blackouts when they cannot bring themselves to buy?)
QTS Realty Trust. After a hiatus of almost a year, insiders have started selling this government focused cloud data center REIT.
Accenture ACN 10 insiders take advantage of previously filed selling plans to unload $9.8 million of stock. Susquenhanna downgrades Accenture to neutral from positive on 10-3-17
Discover Financial Services DFS 5 insiders sell $4.7 million worth of stock in planned transactions. On July 27th Discover was downgraded from Buy to Neutral at BofA/Merill. On Oct. 2nd Bucking initiated it with a buy and a $74 pride target.Of the 23 analysts covering Discover Financial Services (DFS) stock, eight analysts gave “strong buy” ratings on the stock, and another eight analysts rated the stock as a “buy.” Discover is near its lifetime high and it may be profit taking. Or then again it may be burgeoning student loan debt portfolio in excess of $9 billion. According to the 10K, private student loan portfolio has grown from $1.0 billion at November 30, 2010 to $9.0 billion at December 31, 2016.
Korn Ferry KFY 4 insiders sold $3.7 million of executive search firm Korn Ferry including the CEO and CFO which sold 24% and 12% of their holdings respectively.